First up is a nice and simple rising channel play on EUR/USD. The pair found support at the 1.0800 area and is headed for the 1.0900 major psychological handle. The level lines up with not only the mid-channel line, but also the 100 and 200 SMAs on the 1-hour time frame. Even Stochastic is signaling a potential pause with its overbought signal. Euro bears can watch these levels for a potential bounce back to the channel support while the bulls can also wait for a break above the potential resistance area for a possible move to new highs. Whose side are you on?
Not into trading the euro these days? Check out USD/JPY’s potential pullback setup! The pair is about to hit the 118.00 levels, which is right smack in the middle of the 38.2% Fib, 100 and 200 SMAs, and a previous resistance area. Not only that, but Stochastic is also about to hit the oversold region. Who’s up for trading a potential bounce on this one? A long trade could get you a decent trade especially if you build your positions around the Fib areas. Just make sure you keep your trading plans handy in case the markets throw a curveball and drag the dollar even lower against the yen!
Here’s another yen trade for ya! AUD/JPY has just left the 83.00 area, which is also where the 38.2% Fib and 100 SMA are on the 4-hour time frame. Think the Aussie has room for more losses against the yen? A short around currently levels could get you decent pips especially if you place your stops above last week’s highs. Keep your stops wide though, as currency crosses like this one usually see more volatility than the majors!
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.